This week T. Rowe Price presented its 2026 Retirement Market Outlook, providing updates on retirement policy, building a more resilient investment portfolio, how AI is transforming retirement, and advice and personalization.
Aliya Robinson, Director of Congressional Affair kicked off the discussion stating that there is more to expect this year in policy than actual legislation. The upcoming mid-term elections, along with a potential government shutdown, could affect the cycle for six or more months.
She did however talk about the chance or new provisions in the 403(b) market that would provide parity with 401(k)s. "Late last year, the House passed the INVEST Act, which includes a provision that will allow 403b plans to invest in collective investment trusts…There's a chance for this to happen instead of a likelihood because we have not seen action in the Senate on this provision yet. The Senate is working towards their own financial services package and has said this provision would be included, but they have not said how or when that will happen," she noted.
Also, Robinson explained that Congress is focused on cryptocurrency legislation, and whether there will be time for them to consider parity legislation. On the regulatory side, there is a high expectation that the Department of Labor will issue regulations on allowing alternative assets to be invested in 401(k) plans. "We think it's possible that there could be a final rule on this provision by the end of the year, and that will allow for implementation beginning next year. So this is definitely on a fast track and something we expect to see, especially the initial process, but even finalization by the end of the year."
Jessica Sclafani, Global Retirement Strategist emphasized the need for plan participants to have more robust retirement investment solutions given shifts in the investment landscape, which include fiscal expansion, inflation and an uncertain monetary policy. "Many target date solutions have matured to employ a more sophisticated approach to diversification that incorporates a variety of sub-asset classes and potentially could include alternative investment strategies," noted Sclafani. "This could look like exposure to non-traditional bonds and even private markets."
One area of importance, she said, was a sharpened focus on rethinking diversification in relation to how participants are offered exposure to fixed income markets, particularly as fixed income within a target date solution or a managed account. "After a decade of near zero interest rates, bond yields now sit at elevated levels relative to much of the post global financial crisis period. This is prompting DC plan sponsors and their consultants and advisors to re-evaluate participants' fixed income exposure," she added. "Our research suggests that professionally managed multi-asset solutions are the right chassis for offering DC plan participants exposure to private assets."
In terms of AI as part of the retirement planning landscape, Brandon Shea, Defined Contribution Strategist, explained that: "…we're entering a new era where AI can materially prove and improve how advice is delivered, how plans are run, and how participants engage. Independent estimates suggest that $16 to $20 billion in operational savings across the U.S. retirement and pension industry is possible in the next several years."
He further stated that using AI is moving the conversation towards profitability and measurable value. "It's really equipping them with better tools to serve participants and sponsors. But the point is not cost cutting for its own sake. It's what efficiency buys: more time for advice, faster service, [and] better outcomes. We're seeing AI shift from what's possible to what's practical." In order to make this work, Shea stressed the need for cloud-ready platforms, viewing data as an asset, and robust governance.
Finally, Rachel Weker, Retirement Strategist, noted, "In 2026, we are really seeing some personalization becoming foundational expectations, not optional enhancements. And we anticipate that this is going to happen for three main reasons. One is that retirement plan participants are facing increasingly complicated financial backdrops, which are driving more complex decision-making, and they're going to need help. Second, technology is enabling delivery of personalization at scale, and it aligns with the way that participants are actively seeking out advice. Finally, there's an increasing appetite across our industry to deliver scalable advice, especially for participants as they near retirement."
She noted that despite many pressures and complexities of financial life, retirement planning is a top priority among all generations, including the youngest workers.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.